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The System-Wide Impact on the Recipient Region of a Regional Labour Subsidy

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  • Harrigan, Frank
  • McGregor, Peter G
  • Swales, J K

Abstract

This paper analyzes the impact of the introduction of a general, automatic labor subsidy in a regional economy, concentrating on employment effects. The authors adopt a computable general equilibrium approach, using a model parameterized on data from a U.K. region, Scotland. Two particular issues are identified which have usually been neglected in previous work in this area: the impact of the fiscal injection associated with the subsidy and the qualitative and quantitative consequences of allowing the nature of the regional labor market to vary. Copyright 1996 by Royal Economic Society.

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  • Harrigan, Frank & McGregor, Peter G & Swales, J K, 1996. "The System-Wide Impact on the Recipient Region of a Regional Labour Subsidy," Oxford Economic Papers, Oxford University Press, vol. 48(1), pages 105-133, January.
  • Handle: RePEc:oup:oxecpp:v:48:y:1996:i:1:p:105-33
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    References listed on IDEAS

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    1. Harrigan, Frank & McGregor, Peter G. & Dourmashkin, Neil & Perman, Roger & Swales, Kim & Yin, Ya Ping, 1991. "AMOS : A macro-micro model of Scotland," Economic Modelling, Elsevier, vol. 8(4), pages 424-479, October.
    2. F Harrlgan & P G McGregor & J K Swales & N Dourmashkin, 1992. "Imperfect Competition in Regional Labour Markets: A Computable General Equilibrium Analysis," Environment and Planning A, , vol. 24(10), pages 1463-1481, October.
    3. D Holden & J K Swales, 1993. "Factor Subsidies, Employment Generation, and Cost per Job: A Partial Equilibrium Approach," Environment and Planning A, , vol. 25(3), pages 317-338, March.
    4. N/A, 1967. "The 'Green Paper' On the Development Areas," National Institute Economic Review, National Institute of Economic and Social Research, vol. 40(1), pages 26-33, May.
    5. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
    6. Wren, C M & Swales, J K, 1991. "An Economic Analysis of the Revised Regional Development Grant Scheme," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(3), pages 256-272, August.
    7. Kaldor, Nicholas, 1970. "The Case for Regional Policies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(3), pages 337-348, November.
    8. David Begg & Richard Portes, 1993. "Eastern Germany since unification: wage subsidies remain a better way," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 1(4), pages 383-400, December.
    9. repec:ilo:ilowps:296480 is not listed on IDEAS
    10. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    11. Green, G.R., 1993. "An Incomplete Information Core of Dynamic Economy," UWO Department of Economics Working Papers 9314, University of Western Ontario, Department of Economics.
    12. Treyz, George I, et al, 1993. "The Dynamics of U.S. Internal Migration," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 209-214, May.
    13. Jones, Rich & Whalley, John, 1988. "Regional effects of taxes in Canada : An applied general equilibrium approach," Journal of Public Economics, Elsevier, vol. 37(1), pages 1-28, October.
    14. A.T. O'Donnell & J.K. Swales, 1977. "Regional Elasticities of Substitution in the United Kingdom in 1968: A Comment," Urban Studies, Urban Studies Journal Limited, vol. 14(3), pages 371-377, October.
    15. Jackman, R A & Layard, P R G, 1980. "The Efficiency Case for Long-Run Labour Market Policies," Economica, London School of Economics and Political Science, vol. 47(187), pages 331-349, August.
    16. Peter J. Higgs & B. R. Parmenter & Russell J. Rimmer, 1988. "A Hybrid Top-Down, Bottom-Up Regional Computable General Equilibrium Model," International Regional Science Review, , vol. 11(3), pages 317-328, December.
    17. Roper, Stephen & O'Shea, Geraldine, 1991. "The Effect of Labour Subsidies in Northern Ireland, 1967-78: A Simulation Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(3), pages 273-292, August.
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    Cited by:

    1. Gillespie, Gary & McGregor, Peter G. & Swales, J. Kim & Yin, Yan Ping, 1999. "A Computable General Equilibrium Approach to the Ex Post Evaluation of Regional Development Agency Policies," ERSA conference papers ersa99pa260, European Regional Science Association.
    2. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim, 2013. "Forward-looking and myopic regional Computable General Equilibrium models: How significant is the distinction?," Economic Modelling, Elsevier, vol. 31(C), pages 160-176.
    3. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    4. Glyn Wittwer & Mark Horridge, 2010. "Bringing Regional Detail to a CGE Model using Census Data," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(2), pages 229-255.

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